The overnights closed sharply higher, with beans up around 15 cents, wheat around 12 cents higher and corn up 7 or so.

An interesting scenario is starting to develop with the US weather situation. There seems to be a subtle shift from fearing a freeze to positively wanting one.

They've had so much rain over the last month or so, the consensus seems to be now that a freeze would at least enable the combines to get into the fields. Even if there are quality issues with what they cut, at least they'd cut something.

One report I've read this morning quotes a Mississippi farmer as saying that he's had 25 inches of rain on his farm between Sept. 13, when the bean harvest was ready to start, and Oct. 13.

Even a few dry days are unlikely to help the crops to dry out too much with temperatures where they are and November only just over a week away.

There are a few panic signs starting to appear.

With the global economic recovery seemingly underway (except here in the UK of course) inflation could be the next big worry. Printing money willy-nilly causes inflation, that is a given.

If and when inflation takes hold, agricultural commodities could easily be the thing to be in. In the US the large funds are now exiting their wheat shorts as rapidly as they can.

Yesterdays export sales were strong for beans and wheat, but poor for corn. Corn might therefore be more of a follower today.

Crude oil has pushed through the USD80/barrel mark and now appears to be attempting to consolidate above that level.

Early calls for this afternoon's CBOT session: corn called 5 to 10 higher; soybeans called 15 to 20 higher; wheat called 10 to 12 higher.

McDonalds continue to prove that a recession isn't bad news for everybody, turning in a better than expected Q3.

Just like Primark, when the going gets tough peddlers of budget - lets call them "items" - go cher ching.

McD's chipped in with a Q3 net income rise of USD1.26 billion, up from USD1.19 billion in the same quarter last year.

The last time I was in McD's (for a take out 3 kids, 2 adults) the "thing" that was serving me packed the stuff away into their respective bags, and looking at me blankly said "is that everything?"

He was what I call a mouth-breather. He'd heard about the concept of breathing through your nose, but though bugger it why take the risk.

I said "you've packed the stuff mate, you tell me."

"Yeah, that's everything," thing assured me.

It won't surprise you to discover that upon arriving home, it bloody well wasn't everything was it. Neither will it come as an immense shock to hear who's piece of gherkin between two buns so hot that you can't pick them up wasn't in said bag.

No I wasn't lovin' it, thing, there was nothing there to love. The last thing I wanted to do then was drive back into town to ask thing where my bloody burger was.

So, it's not surprising their profits are up is it?

A bit like a Mumbai helpline, they expect that because you know that you're wasting your time driving back into town to complain to thing that your burger was missing, that you won't do it. It's simpler just to give thing your money & walk out.

"You want a quarterpounder without cheese? I've never been asked for one of them before. Hey Marlon, there's a guy here wants a quarter without cheese. What, we can do that? Oh right, OK mate if you just stand over there by that sick on the floor, shifting uncomfortably from leg to leg for twenty minutes, I'll bring it right over."

You probably didn't need me to tell you that the recession in which we are currently languishing is now officially the worst on record.

Whilst our continental chums like France and Germany have officially already dragged themselves out of the mire, we are still in it, up to our necks.

I almost can't wait to see Alistair Darling's face on the news tonight, eyebrows darting manically about, like two caterpillars engaged in some sort of grotesque erotic mating ritual. Shifting uncomfortably from buttock to buttock whilst trotting out something like "I always said that it was along & rocky road to recovery, so all these figures prove is that I'm absolutely right just like I normally am."

Today's news from the Office for National Statistics shows that the economy has shrunk for six successive quarters. In the case of the most recent Q3 by 0.4%, when the market had been expecting a modest 0.2% increase.

The only thing that surprises me is that the pound isn't down more against the dollar and the euro than it currently is, on the news. It could be that the UK is the only major economy that hasn't seen growth in the most recent quarter.

Those QE printing presses could be getting fired up and ready to roll again next month at this rate.

"Go on, it's only another GBP50 billion, Gordon. I'll pay you back next month when I get my Northern Rock divi."

The Russian harvest is just about over with 91% of planted area now cut, according to the Ag Ministry. Although they don't specifically say so, I assume that any grain still left to be brought in will be corn.

As at Oct 20th this season's grain harvest has amounted to 98.8 MMT in bunker weight, compared to 112.2 MMT in bunker weight at the same time last season.

The wheat harvest comes in at 62.0 MMT, they say (65.9 MMT in 2008), that gives us a clean weight of around 60.0 MMT, down 5.8% on last season's 63.7 MMT.

This season's barley production is said to be 18.5 MMT in bunker weight (24.0 MMT in 2008), giving a clean weight harvest of around 17.8 MMT (down 23% on last season's 23.1 MMT).

November soybean closed at $10.05 ½, down 3 cents, December soybean meal at $300.80, up $2.10, and December soybean oil at 38.30, down 26 points. Export sales were very good at 987,305 MT and shipments were 856,403 MT, mostly going to China. It is raining cats and dogs in Central United States Wednesday, drenching farms that are already soggy from a wave train of storms this month, say Martell Crop Projections. After this storm clears through another one will take its place. The weekend forecast continues soggy with more rain on tap, they add.

Corn

December corn closed at $4.03 ½, up 5 ¼ cents, and March at $4.14 ¾, up 4 ¾ cents. Delayed harvest continues to be a concern and is supportive to corn prices despite the rallying US Dollar and lower than anticipated export sales today. Hard freezes in the eastern Corn Belt have forced an end to the growing season in much of Indiana and Ohio. October month-to-date rainfall was heavy even before the rain today. Minnesota had already received 5 inches of rain, Illinois, Missouri and southern Indiana, 6-7 inches. Mississippi and Arkansas have received 10 inches of rain in some areas, say Martell Crop Projections.

Wheat

Wheat finished at 5.51 ¾, up 9 ¼ cents. Winter wheat seedings remain behind average, but huge spec shorts are the main thing behind this market. They've had a good run on the downside but are now getting squeezed out as planting concerns emerge. Export sales were very good this week at 685,137 MT. Trade estimates were between 400,000 and 500,000 MT. Production is also a worry from the likes of Ukraine in 2010, and if demand does pick up, as some are forecasting, then we could be looking at a whole new supply & demand picture a year from now.

EU wheat futures closed higher Thursday, with November Paris milling wheat up EUR1.75 at EUR131.50/tonne, and London November feed wheat ending GBP1.50 higher at GBP103.50/tonne.

A firmer US market helped, after Chicago closed substantially higher overnight. Spec funds seem to be heavily short on US wheat and are getting caught between a rock and a hard place as unwinding of spreads drives US prices higher.

The severely delayed US corn and soybean harvest is also causing some serious concerns over delayed US winter wheat plantings. There is suddenly a lot of talk about many US wheat acres not making it into the ground.

In Europe, whilst export interest is still slack, growing conditions are far from ideal in the UK, France and Spain. In addition further east in the Ukraine there is also plenty of talk of wheat production in 2010 being little above domestic requirements.

Iraq is shopping for at least 100,000 MT of wheat in a tender for offers by Oct. 26.

You can say what you like about the Afghanistan's but, looking at the news tonight, at least they seem to want to make the place look pretty.

Planting all those nice poppies everywhere to try and brighten the place up, fair play to them I say.

Karbul in bloom, or is it in boom, I'm not sure?

And that nice Mr Karzai bloke, offering to count all those votes again, his fingers must be really sore. What an ace chap. He's got a nice gaff hasn't he? I thought it was a bit rough out there, but apparently not. And what a lovely hat, where did he get that?

For the period October 9-15, 2009 the USDA today reported the following export sales:

Wheat

Net sales of 627,600 MT were up 31 percent from the previous week and 10 percent from the prior 4-week average. In addition there were also net sales of 57,500 MT for delivery in 2010/11. Trade estimates were for sales of 400-500,000 MT.

Corn

Net sales of 234,900 MT plus a further 14,600 MT for delivery in 2010/11 were well below trade expectations of sales of 550-850,000 MT.

Soybeans

Net sales of 987,300 MT as per usual were mainly for China (741,500 MT). Trade estimates were for sales of 600-800,000 MT.

Winter wheat and rapeseed are off to a dry start in Western Europe with low September-October rainfall, says Gail Martell of Martell Crop Projections.

The top producing areas in France got less than half of normal rainfall in September, and the United Kingdom and northern Spain are exceptionally dry on a September-October rainfall map, she says.

Field moisture is much better in Germany and Poland, very important growing areas, but cold October weather is stifling growth. Widespread frost occurred last week with minimum temperatures in the upper 20s F on a couple of nights, she adds.

Winter wheat normally accounts for around 90% of total wheat production in Ukraine. Plantings in are just about finished at 5.9 million hectares up to Oct 16, according to UkrAgroConsult. That's a fractional increase on the 5.8 million hectares planted at the same time last year.

Rainfall in August/September was only 25-50% of normal across much of the country, particularly the western half. That means that the 2010 crop has got off to a poor start, with only 50% of it germinated due to drought, according to Deputy Farm Minister Ivan Demchak.

Some local analysts are saying that scattered rains in the last seven days have come too late to help much of the remaining half of next year's crop. Farmers will face some tough decisions in the spring, they say. Sure, they can replant with wheat or other spring sown crops, but cash is very tight.

Limited access to bank credits, and the low level of prices for grains have already forced an increase in planting own-produced seed by 12%. A recent poll by the АPК-Inform Agency also revealed that 22% of farmers already plan not to fertilise their crops this winter.

Some analysts are already forecasting sharply lower wheat production next season, in a country that consumes around 12 MMT of wheat per annum.

Output in 2009 is pegged at around 20-21 MMT, already down around 20% on 2008's bumper 25.5 MMT. Now the Ukrainian Agribusiness Club are forecasting next season's production at only 13-14 MMT.

As recently as 2006/07 the Ukraine government was forced to introduce export restrictions on wheat after adverse weather hit production hard. With exports in the current marketing year already outstripping last season's record pace, there's unlikely to be much in the way of buffer stocks should 2010 production come in sharply lower.

Oct 1st wheat reserves stood at 13.034 MMT, say the State Statistics Committee. That is down 2.754 MMT from Sept 1st. If they carry on usage/exports at that rate then all that 13 MMT will have gone by the end of February.

If I asked you to name two of the top most reliable news reporting agencies in the world I guess that Dow Jones and Reuters would figure quite highly in the list.

It is more than a little perturbing therefore that for the second week running both appear to be blindly reporting crop figures out of Argentina, with little regard for their accuracy.

Maybe it's just me, maybe because I write this stuff so often I have these numbers swimming around in my head constantly. What was last year's Argy soybean planted hectares? Anyone know off the top of their heads? It was 16.6 million, at least that's the figure I have. The USDA say HARVESTED area was 16.0 million, which kind of sounds plausible, with 600,000 abandoned due to the severe drought.

It also seems commonly accepted that planted area this season will be up big-time, somewhere between 18.5 and 20 million hectares.

Today we have Reuters reporting that this season's Argy soybean area will be 19 million hectares, up 7% from 17.75 million last year. They quote the Buenos Aires Grains Exchange for this latest forecast. Now I can buy 19 million hectares OK, but where did 17.75 million from last year come from?

Nobody seems to know. Dow Jones are slightly more cannily reporting area at 19 million ha, up 7%, without actually mentioning what last season's area was.

Yet last week they openly stated that last season's planted area was 16.6 million ha.

Also last week there was some consternation when Reuters and Dow Jones both released stories saying that the Argy wheat crop was down 18.5% on last year.

They both said that it was down from 9.2 MMT to 7.5 MMT, according to the Buenos Aires Grains Exchange. Yet it seems a commonly accepted fact that last season's Argy wheat crop was 8.3-8.4 MMT, certainly not 9.2 MMT.

It seems that nobody in Argentina has a clue what they are doing. If they can't agree on last season's output twelve months down the line, how can we hope that this season's predictions are accurate?

Crude oil futures set a fresh high for the year Wednesday, with new front month December closing at USD 81.37/barrel, after earlier hitting USD 82/barrel.

A weak dollar, spec money, and ideas that an economic recover is underway spurring demand propelled the market to it's highest levels in more than 12 months.

The move came despite the American Petroleum Institute yesterday saying that US stocks rose 3.85 million barrels last week. Today the Energy Information Administration said inventories rose by 1.2 million barrels, slightly less than the 1.5 million the trade was expecting.

The EIA also said that US gasoline inventories fell by 2.2 million barrels in the week ended Oct. 16, considerably more than the 800,000 the market had predicted.

At least for now it seems that the market is willing to push prices higher without much foundation that global demand really has increased. Dangerous territory given last year's dramatic fall from grace after prices declined from USD 147/barrel to USD 34/barrel in little over six months.

November soybean closed at $10.08 ½, up 26 cents, December soybean meal at $298.70 up $6.20, December soybean oil at 38.56, up 1.09 points. Rain and cold is the name of the game for the rest of the week in the US. With the harvest already the slowest in at least the last thirty years, that potentially presents some real problems. Firm crude oil and a weak dollar also helped the cause. Trade guesses for tomorrow's USDA weekly export sales report range between 600,000 to 800,000 MT.

Corn

December corn closed at $3.98 ¼, up 13 ¾ cents, March corn at $4.10, up 13 ¼ cents. As with soybeans the weather is bullish, despite reports of great yields from already harvested fields. Crude oil hit a fresh 2009 high, which was also supportive, as too was a weak dollar. The euro climbed to a 14 month high against the dollar today. Trade estimates for tomorrow's USDA export sales range between 550,000 to 850,000 MT.

Wheat

December wheat closed at a ten week high of 5.42 ½, up 25 cents. The painfully slow pace of the US soybean and corn harvest is likely to negatively impact on winter wheat plantings, particularly SRW sowings in eastern states. Large spec shorts in wheat are now getting nervous and unwinding spreads with longs in beans and corn, which is also helping push up wheat levels. It has to be said however, that export business is only OK at best. Japan are expected to buy 91,000 MT of US wheat tomorrow. Estimates for tomorrow's USDA weekly export sales range between 400,000 and 500,000 MT.

EU wheat futures closed flat to slightly higher Wednesday, with November Paris milling wheat up EUR2 at EUR129.75/tonne, and London November feed wheat ending unchanged at GBP102/tonne.

Sterling rose to it's best levels in more than a month against the dollar, and it's highest since September 24 against the euro, after the BoE minutes revealed that this months vote to hold QE at current levels was unanimous.

With UK wheat largely following the fortunes of the pound over recent weeks, this got London futures off to a negative tone early in the day.

Support came later in the afternoon however when America came in sharply higher following crude oil jumping above USD80/barrel, and severe delays in planting US winter wheat.

Considering that the pound rose close to 1.66 against the dollar and almost 1.11 against the euro, this was quite an impressive performance by UK wheat today.

The Ensus refinery will be open and in production "by Christmas" according to a report on Reuters. The plant will be running at full-tilt by Q1 2010, the report went on to say.

An interesting story on Bloomberg today reveals that German sales of potash and phosphate in the 2008/09 marketing year (July/June) were the lowest since just after the war!

Sales of nitrogen also fell sharply as cash-strapped German farmers voted "Nein" to the highest fertiliser prices in history in 2008.

Potash sales slumped 65%, phosphate sales by 45% and nitrogen sales by a slightly more modest 15%, says the report.

The fertiliser manufacturers aren't going to like that. Particularly when somebody like me points out the fact that German production of wheat was hardly affected at all and output of barley and rapeseed actually increased, in the case of rapeseed by around 19 percent!

The story sadly falls short of mentioning that the fertiliser boys are pointing out that demand this year has however been phenomenal, they are literally down to the last couple of loads in fact, and if you don't book it now you definitely won't get it. Schnell, schnell.

Right, how long before the first email arrives telling me that it's OK to skip a season, but you try skipping two and you're in big trouble? And anyway we don't care 'cos we've only got a couple of loads left anyhow....etc.

The overnight markets closed a tad lower with beans down around 4-5 cents and wheat & corn 2-3 cents easier.

The US harvest is doing more than just lagging, it's performing like a sloth on tranquilisers.

Rain is back on the radar screens this morning, with the latest GFS model indicates heavy rain in the entire grain belt, except in parts of Michigan and Ohio, say Martell Crop Projections. Damp and cool conditions are present across the Northern states, reducing drying prospects as well as hindering harvest attempts.

Wheat seems to be, if anything, the stronger of the main protagonists. The late harvest for beans and corn will affect winter wheat plantings. The unwinding of large spec fund shorts on wheat against longs on beans and corn has probably also got a lot to do with it.

Export business is still fairly thin on the ground. Taiwan purchased 73,840 tonnes of US wheat overnight. Japan are expected to buy 133,000 MT of wheat tomorrow, of which 91,000 MT will be US origin.

Crude oil is almost a dollar down at USD78.25/barrel. The American Petroleum Institute said yesterday that US stocks rose 3.85 million barrels last week. The US Energy Dept are expected to say that inventories increased by 1.5 million when they issue their report later this afternoon.

Wall Street is expected to open modestly lower.

Early calls for this afternoon's CBOT session: corn called 1 to 2 lower; soybeans called 2 to 4 lower; wheat called 1 to 3 lower.

Watch out for incoming emails purporting to be from your email service provider.

Apparently there is a nasty & well-disguised one doing the rounds that comes from support@****.com, where **** stands for the domain that is being used in the recipient's own email address.

The email slips easily past your anti-virus software as it doesn't contain any attachments. What it does do though is tell you that your mailbox settings have been changed, directing you to a link to download & apply the new settings.

The pound leapt to it's highest level against the dollar in more than a month after the release of the minutes of the BoE's MPC meeting on October 7 and 8. It also rose to it's best against the euro since September 24.

The minutes showed that all the members of the MPC voted unanimously to keep interest rates on hold at 0.5% (no surprises there), but more crucially to hold the level of QE at GBP 175 billion.

There were no votes for increasing QE at this stage, as some had been expecting, although there were some differences of opinion on the medium-term outlook for inflation, and how to control it.

The pound climbed close to 1.11 against the euro and hit 1.6570 against the dollar shortly after the news.

Sterling was already in fairly buoyant mood after BoE Governor Mervyn King's comments on the news last night that consumers should expect higher interest rates at some point in the future.

That's hardly rocket science is it Merv? Interest rates will move higher from 0.5% at some unspecified time in the future, cheers. Any other pearls? Interest rates won't go much lower maybe? Or the weather is going to get worse before it gets better?

It does surprise me how stating, as Basil Fawlty would call it, "the bleeding obvious" is capable of moving the market substantially.

Also on the news last night were comments from Merv that the banks should be "split up" to stop them becoming to complacent. That whatever cock-ups they might make in the future they'd get bailed out again, as they are too important to fail.

Can't fault the reasoning on that one.

Under the plan HSBC would be split into four components: H for home loans; S for securities; B for banking; C for crap. Simple.

Monday night's USDA crop progress report shows that harvesting is running 3 to 4 weeks late due to very poor weather, says Gail Martell of Martell Crop Projections. The majority of Midwest and Mid South farms have received 50% above-normal rainfall over the past month. In addition, crop drying has been poor due to cold temperatures, 9 F below average last week in the Corn Belt, she says.

The weather is not improving and in fact looks extremely wet again this week. The updated GFS model indicates heavy rain in the entire grain belt, except in parts of Michigan and Ohio, she adds.

A hard freeze on the weekend damaged immature corn in the Eastern Midwest. Corn ripe and safe from frost was 70-80% in Wisconsin, Michigan, Illinois, Indiana and Ohio, when a hard freeze occurred Sunday night. Ordinarily, a mid October freeze would not be cause for concern, but slow development this year is causing 2-4 week delays in maturity, warns Gail. However, corn that matured safely before the freeze will make very high yields, she says.

Meanwhile, two soybean diseases - sudden death syndrome (SDS) and soybean white mold - are wide spread in Iowa this season, she warns. Plant pathologist XB Yang at Iowa State University said that SDS showed up in August in almost every Iowa region. White mold was so abundant in northern Iowa that Yang found this yield-reducing disease in almost every field on a September 18th scouting trip. The high incidence of disease makes the USDA Iowa soybean yield at 52 bushels per acre seem too high, as that estimate is 5.5% above trend, concludes Gail.

Gail is just getting here website up and running, so why not take advantage of it - whilst it's still free!

As the Russian grain harvest winds down, it would seem that yet again final production is significantly higher than recent official estimates. Anyone spotting a trend here?

Having said that, it looks like final production is probably in line with other trade estimates from more reliable sources like SovEcon.

To date the total Russian grain harvest is 98.8 MMT in bunker weight, say the Ag Ministry, which is down on the 112.2 MMT harvested in bunker weight last season.

The wheat harvest has amounted to 62 MMT, they say, and the barley harvest 18.5 MMT.

If we convert that to clean weight then we should end up with a wheat harvest of around 59.5-60.5 MMT and a barley harvest of 17.5-18.0 MMT. That compares with a clean weight harvest of 63.3 MMT and 24 MMT last season.

November soybean futures closed at $9.82 1/2, down 13 3/4 cents; December soymeal futures at $292.50, down 5.80 points and December soy oil futures at 37.47 cents, down 12 points. The continued slow pace of this season's harvest remains a serious concern. Harvest only improved from 23% last Sunday to 30% as of this Sunday, which is still 34 points behind last year and 42 points behind the five year average. South American group Celeres, estimate that the Brazilian soybean crop is currently 12% planted.

Corn

December corn ended down 1 3/4 cents at $3.84 1/2, and March corn ended down 1 1/4 cents at $3.96 3/4. Harvest progressed from 13% last week to just 17% as of Sunday, and consequently remains well behind last years 28% and the five year average of 46%. The states remaining most behind their averages are Illinois, Indiana, Minnesota, Michigan and Ohio. Harvest pace is now at the slowest level since the USDA began publishing weekly progress reports in 1985.

Wheat

December wheat closed down 1/4 cent at $5.17 1/2. The very slow progress in the corn and soybean harvest is seen adversely affecting winter wheat plantings, especially SRW in eastern states like Illinois and Ohio. World wheat demand seems to be picking up, but a firmer dollar today won't help that come the way of US wheat too much. The Russian wheat harvest is now seen at around 62 million tonnes in bunker weight.

EU wheat futures closed a little higher Tuesday with Paris November milling wheat closing up EUR0.25 at EUR127.75/tonne, and London November feed wheat ending up GBP0.75 at GBP102/tonne.

Dryness in many parts of Europe has not got newly-planted winter wheat off to the best of starts. Meanwhile, excessive wetness is the problem in the US, with the corn and soybean harvest severely delayed threatening to cut winter wheat acres.

In Illinois, the second top US corn and soybean state, only 13% of the state soybeans have been gathered and 11% of corn. For both crops this represents delays of more than one month. Corn here would be 68% complete normally and the soybean harvest 795 done.

For once there wasn't too much change on the currency front, so that had little influence today.

Demand is finally picking up, according to some reports, and a little bit of interest is now also filtering through from spec money dissatisfied by the prospective dismal returns offered by historically low global interest rates.

Reports emanating from India suggest that local millers there might be back in the wheat import market before new crop supplies arrive on the market in the spring.

The overnight markets closed mixed with beans down 4-6 cents, corn 1-2 easier and wheat mixed a cent or so either side of unchanged.

Last night's data from the USDA shows that this season's corn & soybean harvest is easily the latest in at least the last thirty years.

That's bullish for winter wheat, particularly SRW wheat in states like Illinois and Ohio where huge areas of soybeans are still to be harvested before any attempt at getting wheat into the ground can be made.

Three storms over the next two weeks will again put harvest in a holding pattern for many Corn Belt, Plains and Delta farmers, say QT Weather.

Crude oil briefly popped it's head up above the USD80/barrel mark, setting a new high for the year. A weak dollar is also supportive for grains.

Indian wheat futures hit limit up after the governments much-awaited release of state-owned stock tender prices were released, pegging levels significantly higher than millers had hoped.

Algeria bought 300,000 MT of optional origin wheat overnight, and Japan is tendering for 133,000 MT of US/Canadian and Australian wheat. As usual the majority will be of US origin.

European and Asian stocks rose ahead of further expected gains on Wall Street. Apple and Texas Instruments posted decent Q3 profits last night, whilst Caterpillar, DuPont and Pfizer are all making bullish noises today.

Early calls for this afternoon's CBOT session: corn called 1 to 2 lower; soybeans called 3 to 5 lower; wheat called mixed.

The release of the minutes from the Bank of England's October meeting tomorrow may be a defining moment for the pound.

Sterling has jumped by around 7 cents against the dollar and from 1.070 to 1.0950 against the euro since the early part of last week, largely on comments from MPC member Paul Fisher that QE was working.

Tomorrows minutes will cast some light on whether this is the general consensus amongst the MPC policymakers. Especially in the light of another member of the committee being quoted over the weekend as saying that the BoE should continue it's QE measures as the financial system is still not fully recovered.

Last month's minutes revealed that the MPC did not rule out expanding QE somewhere further down the road to recovery. Yesterday they said that "it is possible that sterling's depreciation may be part of a more prolonged process of rebalancing of the UK economy, generating a fall in the long-run sustainable real exchange rate."

Both statements appear to suggest that the recent recovery in sterling may only be temporary.

Meanwhile, news out today reveals that public-sector borrowing in the UK increased to GBP14.8 billion in September (from a revised reading of GBP14.7 billion in the previous month) marks the biggest deficit since record keeping began in 1993. Additionally, public sector net cash requirement rose to a 25-year high of GBP19.4 billion during the same period.

Crude oil broke through the USD80/barrel mark this morning, albeit briefly, to set a new high of USD80.05/barrel for 2009.

The move seems to have more to do with outside influences than supply and demand fundamentals however.

Spec money certainly isn't turned on by US (or UK/Eurozone) interest rates and appears to be looking for better returns from commodities and equities as a bit of consumer confidence returns.

Good results for Q3 from Apple last night lent a bit of weight to ideas that a global economic recovery is underway.

With an estimated 125 million barrels of crude oil/other fuels still sloshing around on the high seas in floating storage waiting for a home, for some recovery can't come soon enough.

A weak dollar is also behind some of the positive tone behind crude, but most of the upside appears to be speculatively-led in anticipation of a spike in demand before one even occurs.

There is some talk that a concerted move above USD80/barrel will trigger further computer-driven buying, pushing prices still higher. A move to USD90/barrel would be interesting, as that marks the halfway point between the 2008 (was it really ONLY last year?) all-time high of $147/barrel and the more recent low of $34/barrel.

United Oilseeds has reported a pre-tax profit of £1.03 million for its financial year ended 30 June 2009. During the same period, the group’s net worth grew by almost 5% to £4.23 million compared to £4.04 million the previous year. Turnover also increased by 34.5% to £54.6 million from £40.6 million the year before.

It's official, this year's US harvest pace is comfortably the slowest in the last thirty years. The flip-side of benign and non-threatening weather all summer long, is a very late maturing crop and combines rolling in the snow.

The USDA confirmed last night that only 17% of the corn crop has been harvested so far, that is a quite astonishingly low just four point increase in a week. That's well behind the five year average of 46%, and five points lower than the previous slowest pace in the last thirty years of 22 percent on October 18, 1992. Illinois sees just 11% of the crop in the barn, compared to 68% normally.

For soybeans the harvest was 30% complete as of Sunday, only a seven point increase on last week and less than half the five year average of 72%. The previous slowest harvest pace in the last thirty years was 34 percent on October 18, 1985. In rain-sodden Illinois only 13% of the crop is in, compared to 79% normally.

Winter wheat plantings were 69% complete, compared to 78% normally, the USDA said. It's the soft red winter wheat states in the east that are particularly struggling. They need to get their beans cut before they can plant wheat. In Illinois wheat planting crawled from 12% complete last week to just 13% done as of Sunday. The five year average is 67%.

Canny, cagey, cunning, unscrupulous or just plain bent? Trying to guess what the Indian government are up to is like attempting to figure out the plot of the Da Vinci Code.

Unless you have been living in a cave and not reading this blog, you will probably know by now that up until now they have been keeping the doors to their state-owned wheat granaries firmly shut.

That is despite reputedly owning anywhere from 28-32 MMT of wheat depending on who's figures you believe (I believe neither, but that is a seperate issue), and appeals from the local milling industry that there is virtually no more wheat left in the country in private hands.

The worst monsoon rains since 1972 have slashed summer rice production, and demand for wheat this year is consequently expected to be higher than ever in the world's second largest consuming nation. The USDA currently have India down to consume almost 77 million tonnes of wheat in 2009/10.

News this morning then, that the government have finally set the minimum price for wheat tenders should come as good news, right?

Not so, when you consider that domestic Indian wheat prices have been running at around Rs 1,200-1,300/100kg and that the government have now fixed the minimum tender price at Rs 1,379.70 - Rs 1,728.23/100kg, according to the Hindu Business Line.

Indian wheat futures prices have jumped the exchange imposed daily limit up this morning, as the tender prices are hugely above what the market had been expecting.

With international wheat prices currently substantially lower than the levels now being asked for the the government, this could spark a wave of import interest from Indian millers.

It seems like another bit of neat buck-passing by the government to me, very similar to their manoeuvres a few months ago on sugar. Then, by introducing a strict limit on the quantity of domestic sugar stocks that large users could hold (but crucially not on imported stocks), they effectively forced the likes of Nestlé and Pepsi to switch to using mostly imported sugar.

With a domestic usage rate of almost 6.5 million tonnes/month, and the winter wheat harvest still six months away Indian millers need a hell of a lot of raw material between now and then.

November soybeans finished at $9.96 ¼, up 18 ¾ cents, December soymeal futures finished at $298.30, up $3.60, December soy oil futures finished at 37.59 cents, up 65 points. The USDA reported that 39.092 million bushels of soybeans were inspected for export for the week ending October 15, that was well above trade estimates. A dry weekend and early start to the week will again give way to another round of rain beginning Tuesday in the west, spreading eastwards, further hampering harvest efforts.

Corn

December corn futures settled at $3.86 ¼, up 14 ¼ cents. A weak dollar and firm crude oil helped corn today. Oil increased for an eighth straight day, its longest winning streak in two years, to close at it's best levels in twelve months. It's back to normal as far as US weather is concerned starting tomorrow, with widespread rains sweeping in from the west. The USDA reported that 24.569 million bushels of corn were inspected for export for the week ending October 15, which was towards the low end of trade estimates.

Wheat

December wheat futures closed at $5.17 ¾, up 19 cents. The USDA reported 18.627 million bushels of wheat were inspected for export for the week ending October 15, in line with expectations. Wet weather delaying corn and soybean harvesting may also ultimately lead to lower US winter wheat seedings. Large spec fund shorts have been vulnerable to a technical bounce in wheat futures in recent sessions. A weak dollar was also supportive.

Outward-bound EU Farm Commissioner Mariann Fischer Boel has emptied out her handbag and announced EUR280 million in aid to it's beleaguered dairy farmers.

The funding, which still needs to be approved by the Finance Council, has won support from 21 of the 27 EU member states.

Boel said that the cash will effectively empty the 2010 kitty, leaving no money to fund any new requests for help from other agricultural sectors in next years budget.

It seems unclear at the moment how the money will be allocated. Possibly it will help fund the recent change to the rules that will now allow up to EUR15,000 of temporary aid to be paid by individual member states to each EU dairy farmer.

Having driven fairly extensively around the North, East and Midlands this past week, maintaining the blog has taken a bit of a backseat. Blog devotees will be please to know that I am back from my travels and plan on going nowhere now for the rest of the week.

One thing that struck me whilst out and about is the number of unplanted fields around at the moment. Possibly more so than even last year, particularly around the Humber.

With barley about as popular as a ginger-haired stepson at the moment, I doubt very much that these unplanted acres will be going into spring cereals. Spring rape performed pretty well this year so maybe that is the plan? I guess it could be considering that soybean prices have held up reasonably well compared to wheat over recent months.

The wisdom of increasing rapeseed production shortly after of a record US soybean crop, and potentially record output from both Brazil and Argentina in the spring, might look questionable come next summer though.

Another thing that struck me is how dry it is everywhere, we certainly had a very dry September, and October is shaping up to go the same way.

The radio this morning is full of the story that Gordon Brown is warning of drought, floods and heatwaves, unless global governments get their arses into gear before crucial climate change talks in Copenhagen in December.

Mind you they were also reporting when asked what his favourite type of biscuit was he took 24 hours to formulate a reply. A man who takes a full day to prevaricate over the virtues of a chocolate hobnob vis-a-vis a custard cream perhaps isn't to be trusted to speed up a reappraisal in attitude to climate change in my humble opinion.

"Anything coated in chocolate," was his in-depth reply, just in case you were wondering. I always knew he was attracted to Jaffa's.

About Me

Worked in agriculture for over 30 years as a shipper, merchant, trader & broker, but still hasn't got the faintest idea what he's talking about.
Likes beer apparently, so why not do the decent thing an hit the donate button you tight bastard?
He can also provide content for your website like market reports and commodity prices. And if you haven't got a website he can design one for you. In short, the man's a bloody genius.

Disclaimer

All comments on this website are the sole opinion of the author, and are not capable of nor intended to constitute professional advice. Neither can Nogger give any guarantee for the accuracy of any of the information or data contained within this site.

The guy is clearly deranged and you should almost certainly ignore everything that he says.